The increase in excise duty from four to five per cent is expected to make the product costlier
Domestic waste paper-based newsprint and writing and printing paper industry will get relief from the halving of import duty on waste paper to 2.5 per cent proposed in the Budget. The increase in excise duty from four to five per cent is expected to result in an increase of Rs 450-500 a tonne in writing and printing paper prices. Prices of newsprint and packaging board are also expected to increase.
“Overall, the impact is marginal. But given the cost pressure, the industry will try to pass on the impact of increase excise duty increase,” said V Kumaraswamy, chief financial officer, JK Paper.
The domestic newsprint industry and waste paper-based producers together import around 3 million tonnes of waste paper annually. The cut in import duty will come as a benefit to such manufacturers. Newsprint producers require 1.35 tonne waste paper to produce every tonne of newsprint. The newsprint industry had long been pushing for a reduction in waste paper duty since its duty of 5 per cent was higher than the duty of 3 per cent on newsprint, a finished product.